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Breaking Down the Impact of 'Higher for Longer' Interest Rates

Updated: Apr 20

RL186 – Breaking Down the Impact of 'Higher for Longer' Interest RatesRL185–11 Year-End Financial Planning and Investing Tips

In this episode of the Retirement Lifestyle Show, Roshan Loungani and Adrian Nicholson break down the impact of higher interest rates on people's financial lives. They cover topics like natural market reactions to higher interest rates, the impact of higher rates on American households, and what the Fed is doing to combat inflation.

[00:00] Introduction

[01:30] Why the Fed Raises Rates as Fast as They Do

[02:32] Impact of Higher Interest Rates at the Household Level

[06:00] What to Expect From Mortgages Going Foward

[08:03] What Are the Golden Handcuffs?

[09:30] Natural Market Reactions to Higher Interest Rates

[12:53] Interest Rates and Student Loans

[14:22] People Living on a Fixed Income

[15:40] How Rising Rates Impact Companies

[18:17] The Type of Companies You Should Consider Investing In

[21:54] The Current State of Commercial Real Estate

[24:30] Do Interest Rates Affect Real Estate Investment Trusts?

[26:26] The True Cost of Government Debt

[30:41] Parting Thoughts

For more links and the full show notes keep scrolling down!

Roshan Loungani can be reached at or at 202-536-4468.

Erik Olson can be reached at or 815-940-4652.

Adrian Nicholson can be reached at or at 703-915-8905.

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Full Show Notes:

Expect Higher For Longer Interest Rates

The Fed recently revealed that interest rates will remain high for an unknown period going into 2024. So, if you're waiting for interest rates on car loans, mortgages, student loans, credit cards, and other kinds of loans to fall significantly, you're in for a rude shock. In September 2023, the Fed increased its estimate for how long it'll try to mitigate inflation and stabilize the economy by keeping interest rates high. This means the Fed will keep the rate higher for longer than the June 2 forecasts. So, what does this mean for the average American? According to Roshan, people can expect higher interest rates on consumer loans. The good news is you can also expect higher returns on savings accounts. Savers will now get rates close to 6% on deposits - something that is unheard of in recent years. Data on jobs, consumer spending, and economic growth also showed that the economy is surprisingly strong as the Fed tries its best to cool inflation.

All opinions expressed by podcast hosts and guests are solely their own. While based on information that they believe is reliable, neither Arete Wealth nor its affiliates warrant its completeness or accuracy, nor do their opinions reflect the opinion of Arete Wealth. This podcast is for general informational purposes only, and should not be regarded as specific advice or recommendations for any individual. Before making any decisions, consult a professional.

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